The digitalisation of financial services is afoot in Ghana, and Zenith Bank, winner of World Finance’s Best Banking Group award three years in a row (2015 to 2017), is in the vanguard of the trend. The demand for greater convenience and scale, together with lower costs, is currently spurring digitalisation at an exponential rate.

Furthermore, regulators and industry players are now recognising that new, dynamic channels are required to bring formal financial services to the doorsteps of those who have previously been excluded.

A new way to bank
Perhaps the most popular and transformative instrument of digitalisation in Ghana’s financial sector has been the mobile phone. Mobile banking in Ghana is currently on the rise.

This relates specifically to basic banking services, such as balance checking and fund transfers, which customers can now easily access through their mobile phones.

When mobile phones first arrived on the market and were far less sophisticated than they are now, Zenith Bank released a product called Z-Mobile. This was before other banks had even taken notice of the looming trend.

This platform gave customers access to their bank accounts using the basic handsets that were in vogue at the time. Since the proliferation of smartphones and tablets, the bank has relaunched Z-Mobile as a mobile banking app, making Zenith Bank one of the first in the Ghanaian banking industry to launch a mobile banking app.

Z-Mobile, which is simple to use and extremely secure, enables customers to access their accounts and conveniently carry out banking transactions from any part of the world via their smartphones and tablets.

The app allows customers to check accounts, view transaction history, top up investments (within Zenith and other investment houses like Databank), set up beneficiaries, make instant intrabank and interbank transfers, and pay bills – all on the go.

Mobile Money is a nationwide platform owned by the country’s mobile operators, which uses mobile phones to supplement the financial system’s infrastructure.

In doing so, it provides remote financial services that are less costly, both for users and in terms of physical infrastructure. It is estimated that around 20 percent of adult Ghanaians now have a Mobile Money account, compared with practically zero a few years ago.

These Mobile Money accounts are used to receive or send money, as well as to pay for goods, services and bills. According to the central bank’s data, Mobile Money transaction volumes have virtually doubled each year for the past five years, with the value reaching $9.3bn between January and July 2016.

While some Ghanaian banks bemoan the competition from Mobile Money, Zenith Bank is tapping into the opportunities and possibilities it presents to grow its own business.

This is being done, for instance, through the bank’s Mobile Money Bank2Wallet service. The service enables customers to link their Mobile Money wallets (either MTN or Airtel) to their bank accounts in order to transfer money between their accounts and wallets, and to make payments remotely at any time of the day.

Today, less than a year after the service was launched, well over 12,000 subscribers have signed up, with monthly transaction values reaching beyond GHS 150m ($34m).

Innovative uptrends
Electronic banking was once considered ‘rich-world banking’ in Ghana. Those were the days of poor internet services and limited accessibility. It was a time when the middle class was barely visible.

This narrative has now changed – gradually at first, but dramatically in the last couple of years. This can largely be attributed to Ghana’s fast-growing middle class, which is led by an energetic, entrepreneurial cohort of Millennials who have grown up with mobile technology. It has therefore become clear that transacting financial services over the internet is a credible and cost-effective alternative to face-to-face banking.

Digital channels afford the unbanked an opportunity to leapfrog barriers that have historically excluded them from the financial system

In e-banking, as in other areas, Zenith Bank’s innovations have heralded new milestones, not only for the bank, but for the whole industry. For instance, Zenith GlobalPAY, a secure, web-based collection gateway, which enables merchants to accept online card payments in real time from customers worldwide.

With a one-time integration process, merchants on GlobalPAY can receive payments from a variety of locally and internationally issued cards. This product has proved popular, with transactional volumes hitting GHS 35m ($8m) last year.

As of June, transaction volumes had exceeded those of 2016, and are estimated to reach $70m by the close of 2017. With increasing demand from merchants to sign on to the GlobalPAY platform, future projections could see volumes tripling year-on-year.

Zenith Bank’s continued investments and upgrades have produced a robust digital banking infrastructure for the bank, which is complemented by the best debit, pre-paid and credit cards on the market.

This year, in addition to its suite of Visa cards, the bank has also rolled out MasterCard debit, pre-paid and credit cards, expanding the options for customers to access their funds from more than 33 million locations worldwide.

Card issuance currently stands at over 300,000 and is expected to grow further, with more card products at the final stage of approval. When these new card products are approved, issuance could reach over half a million each year.

The prospects for further growth in e-banking are excellent, with Zenith Bank’s regulator, the Bank of Ghana, encouraging the industry to maintain innovation as it attempts to reform the payments system. These reforms aim to make it more secure and diversified.

The economy’s return to rapid economic growth in 2017 will also restore consumer spending and bolster demand for banking across a broad range of services.

Financial inclusion
Besides enabling the banked to conduct financial services with greater ease, digitalisation is also promoting financial inclusion. Digital channels afford the unbanked an opportunity to leapfrog barriers to brick-and-mortar banking, such as cost and infrastructure, that have historically excluded them from the financial system.

Of the 20 percent of Ghanaian adults who have Mobile Money accounts, half do not actually have a bank account. This proves that Mobile Money does not just enable cheaper and more convenient financial services for those who already have access, but is also spreading its reach to those who were previously excluded.

Having operated as a major financial services provider in the country for more than a decade, Zenith Bank has an approach to financial inclusion that is built on a deep understanding of the reasons for financial exclusion.

Essentially, the causes of low financial inclusion can be explained by both demand and supply constraints: demand constraints limit demand for financial services to those who tend to be excluded, while supply constraints restrict supply from financial institutions to the underserved population.

On the supply side, the high cost of building and maintaining physical bank branches has been a major hurdle in extending financial services to remote communities.

While Zenith Bank has been undertaking strategic physical branch expansions across the country, its frontline role in digitalisation is positively enhancing financial inclusion in Ghana.

On the demand side, Zenith Bank recognises that the kinds of financial products and services offered by providers, as well as their design, availability and how they are marketed, are important determinants of uptake by both bankable and unbanked individuals.

The bank has therefore been prioritising product and service innovation to suit the needs of varied market segments, including those frequently underserved.

Recently, the bank stepped up its engagement with small and medium enterprises (SMEs), which are more likely than other firms to be unbanked, by training special staff whose main responsibility is to cater to SMEs’ specific banking needs.

Zenith Bank believes the momentum that digital finance has gained in Ghana will remain strong for years to come, driven by government and regulatory initiatives, innovation by service providers, increasing financial literacy, and an improving economy.

The bank stands ready to take advantage of both the opportunities and challenges this evolution will present by continually investing in its people and infrastructure, innovating new products and services, exploring strategic partnerships, and putting the customer at the heart of everything it does.

Zenith Bank was recently named the bank that best promotes cashless transactions in Ghana at the 16th Ghana Banking Awards for the third time in a row. This recognition underscores Zenith Bank’s leadership in digital finance in the Ghanaian banking industry.